A sharp rise in new orders drives continued growth in the emirate’s non-oil private sector economy.
Business conditions in Dubai’s non-oil private sector economy improved to its strongest level in two-and-a-half years in December, driven by a sharp increase in new orders amid a Expo 2020 demand boost and improvement in the emirate’s tourism sector.
The emirate’s seasonally adjusted IHS Markit Purchasing Managers’ Index climbed to 55.3 in December from 54.5 in November, signalling a sharp improvement in operating conditions as the non-oil economy continued recover.
A reading above 50 indicates economic expansion while one below points to a contraction.
The upturn was driven by a “robust increase in new order volumes”, David Owen, an economist at IHS Markit, said. The rate of growth was the quickest seen since July 2019 and back in line with the trend for the IHS Markit survey series, which began 12 years ago.
“Dubai’s PMI continued to signal strong growth in the non-oil private sector at year-end, with the Expo 2020 and a general improvement in demand helping to lift the economy further out of its pandemic-induced downturn,” Mr Owen said.
Businesses surveyed said the rise in new work was mostly driven by the easing of pandemic-related restrictions and ease of travelling, which, along with the Expo 2020, boosted tourism demand. Business managers also cited an improvement in local sales as consumer confidence grew in economic recovery.
“The new orders [sub-] index was at its highest level for 29 months, and back in line with the series trend after running below it for the entirety of the pandemic,” Mr Owen said. “Output was also strong, expanding at the second-fastest pace since mid-2019.”
Travel and tourism sector continued to lead the expansion of Dubai’s private sector non-oil economic expansion in terms of sales growth.
The number of visits to Expo 2020 Dubai, which began in October, reached almost nine million at the half-way mark, organisers said last week. A total of 8,958,132 visits were made until the end of December, with season pass holders comprising 47 per cent of total visits.
The six-month long global fair has also driven the wholesale and retail sector in the emirate which continued to improve in December.
New work at construction firms also grew last month at the fastest rate since February, but lagged the pace of growth seen in the other two sectors, according to the survey.
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
